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The games politicians play, pt. 2

When previous adjustments were needed to be made to the Social Security disability (SSD) insurance program, Congress took the easy way out. Put simply, they should have raised taxes to fully fund the program. Instead, they took money from the FICA tax, and reallocated the percentage SSD receives. This lowered the amount going to the Old-Age and Survivors Insurance (OASI) program, commonly referred to as the Social Security retirement program.

This had been done many times, and in 1994, it led to the projection that the SSD trust fund would be exhausted, absent any changes by Congress in 2016. Surprise! There have been no changes by Congress and the trust fund will be exhausted in 2016. Congress finally acted to prevent another 1994 type reallocation.

What they did is insidious and certainly counterproductive. Let us remember, all of the numbers in SSD and OASI are arbitrary. From the benefit payment rate to the tax rate collected, Congress can set them wherever they want. They could have made the hard choice and raised the tax rate and the amount of income taxed. That solution would "fix" both the retirement and disability programs through 2085.

Instead, Congress will only allow a 0.01 percent transfer for any one Congressional session. This is just about enough to prevent the 19 percent benefit cuts that would otherwise occur when the trust fund is exhausted.

This would allow Congress to keep a permanent crisis atmosphere surrounding SSD, complete with misinformation relating to "fraud and abuse" within the program. If Congress is really interested in those topics, they need to adequately fund the Social Security Administration, so it can perform Continuing Disability Reviews (CDR).

However, Congress has cut SSA's budget requests in recent years, leaving the agency underfunded and understaffed. These reviews have been shown to produce $9 of revenue for every $1 spent, so it is puzzling why Congress refused to fund them.

Unless, they what they really want is a fake crisis they can use to attack SSA and its programs.

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